Dot-com Bust Survivor Telogis Finally Takes Funding

Though each day seems to bring money to more new companies, it wasn’t that long ago that funding startups was close to impossible. Telogis, which lived to tell that tale, is finally accepting venture capital.

And it’s quite a hefty sum. The Southern California company, which operates a Web service to help companies closely track fleets of vehicles, is announcing $93 million in funding in a round led by Kleiner Perkins Caufield & Byers.

Until the infusion, Telogis says it has survived since its founding in 2001–when the dot-com bust sent major startup investors into hiding–on money from its founders and other individuals and cash flow from operations.

“We are the definition of a boot-strapped company,” says David Cozzens, its CEO.

It comes quite late in the game, when the closely held company has about $85 million in annual revenue, around 4,000 customers and is tracking on the order of 350,000 vehicles, Cozzens says. He sees the money as a way to get bigger fast on the runway to an initial offering likely to come soon.

“We are looking at late 2014″ for an IPO, he says.

Telogis, in several ways, reflects the culmination of several trends that were not apparent at the time of its founding, Cozzens says. One is the rise of GPS technology to help track where vehicles are.

Another is advances in sensors and on-board computation capability that generate data about how cars are being driven, and wireless networks that help share that data outside the vehicles.

Finally, Telogis exploited the evolution of software-as-a-service–placing data from vehicles in the cloud for easy viewing and analysis, so that companies that own vehicle fleets can track their cars and trucks without the need to set up their own servers for the purpose.

Companies that operate vehicles have many reasons to monitor how they are being used. For those involved in delivery or home service calls, Cozzens says, it helps to track where each truck is, how long they remain in various spots and plan the best routes and schedules for serving customers.

To hold down insurance bills, it also helps to know driver behavior. Using Telogis data, for example, fleet owners can know how frequently drivers buckled their seat belts and whether they stayed below speed limits in particular areas, Cozzens says.
The company markets technology on its own and through partnerships with companies that include Ford and Volvo.

Kleiner came to know about the company as part of its research into technologies for saving energy, says Ryan Popple, a partner for the venture firm who formerly worked at Tesla Motors and is joining the Telogis board. He said the funding will give the company freedom to invest in a range of areas, while waiting for the perfect time to offer stock to the public.

From the perspective of financial management and control procedures, Telogis “is already operating like a public company,” Popple says.

Besides Kleiner, the company has a relationship with Morgan Stanley as a potential underwriter on the IPO, Cozzens says.